Move Over, Tech

• The S&P 500 Equal Weight index is experiencing its strongest relative performance to start a year since 1992, benefiting from gains across multiple sectors rather than just large-cap tech stocks
• Economic growth remains robust with real GDP increasing 4.4% annually in Q3 2025, and the Atlanta Fed projecting 4.2% growth for Q4 2025
• Broadening corporate profit growth, fiscal stimulus from federal tax cuts, and improving market breadth are expected to reward diversified portfolios and stockpickers going forward

Market Summary: Broadening Stock Market Returns Signal Healthy Shift

Key Development:

U.S. stock market returns are expanding beyond technology stocks, marking a significant shift in market leadership. The S&P 500 Equal Weight Index is experiencing its best relative start to a calendar year since 1992, outpacing the traditional market-cap-weighted S&P 500 by 4.2% year-to-date through February 6, 2026.

Sector Performance:

Previously lagging sectors are now gaining momentum, including materials, consumer staples, and energy—all posting positive returns in 2026. This represents a departure from the tech-dominated market concentration that characterized recent periods.

Supporting Factors:

• Corporate Earnings: Profit growth is broadening across market segments beyond mega-cap technology companies
• Economic Strength: Real GDP grew at 4.4% annually in Q3 2025, with Atlanta Fed's GDPNow model projecting 4.2% growth for Q4 2025
• Policy Environment: Federal tax cuts and fiscal stimulus expected to support spending, while monetary policy becomes less influential

Market Implications:

Analysts view the broadening market participation as a healthy sign for overall market strength. The trend is expected to benefit:

• Diversified portfolios with exposure across multiple S&P 500 sectors
• Active managers and stock-pickers seeking opportunities beyond major indices
• Goals-based investors maintaining diversified, flexible strategies

Bottom Line:

The shift from concentrated tech leadership to broader market participation suggests improved market health and creates more opportunities for value discovery across sectors and industries in the coming months.